KCA spot rate, lint prices in ready business soar to all time high mark following US cotton futures

All time record was marked in cotton prices in local markets where spot rate surged to Rs 10,800 on Friday.
WORLD SCENARIO:
The coming 2011 cotton season as apprehended by far worse despite world Beltwide cotton conference about a week back plantings is expected at 12.48 million acres to 12.53 million acres, higher than the season was around 11.04 million acres. The cloth retailers see a tight position. China is for sometime stocking cotton keeping in view lunar year when buying is disrupted for around a fortnight. The lunar year is celebrated with added mirth and joy.
The La Nina weather is which hits US best cotton growing Texas is being watched with concern, meanwhile, cotton planting report is awaited shortly by the Industry's cotton council which is taken seriously. The report is released during annual meeting of cotton council likely in San Diego next week. Here is Asia, India in leading surplus position is keeping buyers at bay, particularly this flood ravaged Pakistan. The contract for 1.5 million bales was signed and hurdle about four lakh bales had been received, the remaining was arbitrarily held up owing to rising cotton rates world over.
Twice Indian authorities have signalled they were weighing contracted orders to be delivered but so far not a bale has been delivered. But are not authorities in Pakistan equally responsible for future to get contracted quality delivered.
On Monday the US cotton futures climbed the daily trading limit for the second straight session on speculative buying fuelled by strong Chinese prices and tight deliverable supplies. Cotton was the best performing commodity of 2010 in the Reuters-Jefferies CRB commodity index as it rose over 90 percent, and is the top performer so far in 2011. Cotton is now trading at its highest level since the US Civil War. The key March cotton contract on ICE Futures US rose the five-cent limit to trade at $1.6194 per lb at 10:06 am EST (1506 GMT). The session low was at $1.605.
On Tuesday the US cotton futures finished lower as speculative buying powered the spot contract to a fresh record high, but that faded and back months sank as a lack of support and fears of a slowdown in top consuming countries such as China weighed on fiber contracts. The cotton market had risen nearly 20 percent since mid-January, driven by strong prices in top consumer China and tight deliverable supplies in the US cotton market. The key March cotton contract on ICE Futures US fell 0.11 cent to close at $1.6183 per lb, with the contract hitting a new spot record high at $1.6789. Total volume was twice the 30-day average at 38,800 contracts, Thomson Reuters preliminary data showed. Spot March was driven by heavy speculative buying but the rest of the board "did not have the same support" and lost ground as a result, said Sharon Johnson, senior cotton analyst at brokerage Penson Futures.
On Wednesday the US cotton futures finished up the daily limit on another round of speculative and fund buying as players eyed release of a government sales report to gauge demand for the fibre. The cotton market has jumped almost 20 percent since the middle of January, fuelled by robust prices in top consumer China although the Chinese are stepping away for the Lunar New Year festivities which get going next month. The key March cotton contract on ICE Futures US rose the 5.00 cent limit to close at $1.6683 per lb, short of the new record high at $1.6789 set on Tuesday. The low for the session was at $1.6081. Total volume stood at 17,100 lots, about five percent below the 30-day norm, Thomson Reuters preliminary data showed.
On Thursday the US cotton futures settled higher on renewed speculative and fund buying boosted in part by a government sales report. But profit taking knocked the market off its new record highs. The cotton market has risen over 22 percent since the middle of January, inspired by strong cotton prices in top consumer China and partly on tight deliverable stocks of cotton on the ICE Futures US exchange. Cotton's fresh rally made it the early leader of commodities in the Reuters-Jefferies commodity index in 2011, as it rose 17 percent year to date. In 2010, cotton was the best performing commodity as it went up over 90 percent. The key March cotton contract on ICE Futures US rose 2.56 cents to finish at $1.6939 per lb, having traded up the six-cent limit at a new record top of $1.7283. The session low was at $1.6625. Total volume stood at over 35,000 lots, almost double the 30-day norm, Thomson Reuters preliminary data showed.
On Friday the US cotton futures closed sharply lower on profit taking and end-of-the-week liquidation as players cashed in their gains after the market hit new record highs this week. Stumbling grains prices and fears the unrest in Egypt may lead to macroeconomic weakness also weighed on fibre contracts, they said. The key March cotton contract on ICE Futures US fell 4.64 cents to finish at $1.6475 per lb, trading from $1.6451 to $1.711. Total volume stood around 23,700 lots, about a quarter above the 30-day norm, Thomson Reuters preliminary data showed.
LOCAL MARKET:
Genuine cotton buyers kept away from market as NY cotton futures hit record high. The volume came down to just 4000 bales in price range at Rs 10,000 and Rs 10,500 depending on quality. Spot rate stayed put at Rs 10,100, the ginners are still avoiding to buy new arrival as a mark of protesting against wealth tax.
Market sources had nice information regarding favourable yarn prices. On Tuesday cotton prices but all time high level bring down buying 15000 bales, changing hands between Rs 10,300 and Rs 11,800, being the highest. The world prices as depicted in NY and China, Pakistan can't escape the surge. Spot rate was raised by Rs 500 to Rs 10,600. The cotton consumers who had waited to see prices come down resumed buying though high prices hurt them. The market access to the EU in view why consumers gather courage to lift.
On Wednesday, small business was marked on the cotton market as arrival contracted resulting in soaring prices. Spot rate was unchanged at Rs 10,600. The new arrival has nearly held up as the ginners are on the defence refusing to pay WHT. In ready off take 8000 bales changed hands at Rs 10,200 and Rs 11,000 depending on quality. However, buyers are taking strict resource to caution on ginners strict attitude to relax instance. The world rate of cotton, which dipped failed to vindicate so locally.
On Thursday ginners called off strike on assurance that the issue has been deferred for the time being - March 31, 2011. Spot rate was put at Rs 10,600. In ready business about 16,000 bales of cotton changed Rands in price range of Rs 10,350 and Rs 11,000. The ginners who had stopped buying cotton nor were relaxing prices, may receive phutti brought to ginning units. The growers may gain but there is no surety problem ends here.
On Friday spot rate, lint prices in ready dealings hit all-time high levels as mills showed interest in fresh buying to keep the industry wheels moving. The Karachi Cotton Association (KCA) spot rate was Rs 10,800. Phutti prices in Sindh and Punjab were at Rs 4200-5000. In the ready business about 15,000 bales of cotton changed hands between Rs 10,350-11,650, it was also reported that 600 bales of cotton from Upper Sindh sold at record high at Rs 12000.
On Saturday trading activity was slow on the cotton markets prices hit the all-time high level mainly due to sharp rise in the world market and short crop locally. The Karachi Cotton Association (KCA) spot rate was unchanged at Rs 10,800. Phutti prices in Sindh and Punjab were also unchanged at Rs 4200-5000. In the ready business about 5,000 bales of cotton changed hands between Rs 10,400-12,000.
SHOULD PAK COTTON CONSUMERS RUN BEHIND:
The fast pace India is after cotton importers, latter seem to be in wait for even louder call. Any befall crops encounter is hardly be foreseen. This fact, producers and stockholders keep in view and the remedy-hold back cotton from exports. Unfortunately the Pak importers are immense need of cotton to cover up shortfall brutally caused by September 2010 floods. But in Pakistan except hearing some thing in whispers, nothing is visibly audible.
The height is that Pak importers are showing little impatience to ensure over one million bales of cotton is delivered. The agreed contract held back apprehended set bag owing to sudden outbreak of rains. However, watchful authorities in India took no time to knock people in China and India major buyers. It's now Pak turn to be quick and positive to get delivery of due bales of cotton, this side of Wagah border. There are two main road blocks - rising world cotton prices and local mills need. Authorities are orthodox about their requirements, which they keep in view. Once is whispers it came to knowledge that foreign ministry was aware of the fact and will approach proper quarters to expedite delivery of over one million bales of cotton. But has ministry come in action or is waiting in sudden change in Indian cotton authorities as has twice been done before?
COTTON VALUE ADDED PRODUCTS CAN DO ALONE:
Thank God for favouring us with four seasons and as many staple foods besides dry fruits of all kinds and juicy ones, ensuring not a single essential items to be imported, but for show up, often sugar, wheat import reports are read in newspapers but a little stress on memory will beam out fact that hypocrites sold out crying bourse that it was in excess of population, for sheer fattening the bank balance, thank to democracy, needing manifold more money than fixed by the election commission to get vote.
Besides food items cotton is gift item offering not only "wears" but wide variety of products for exports yielding forex that caters to other needs of this country. But there are enthusiasts who export cotton and other semi-cotton products blocking exports of value-added products, which in the absence of knowledge based export products, singly catering to the most requirements, though much remaining to be desired in the absence of what very often is called loudly "national interest", could any body think in the beginning of cotton season rate will surge 60 to 70pc in mid-season only partly for local factor - such as giant floods, but mostly because of international trend should it not be advisable to keep Pak identity its own.
US WORKING ON ROZs MARKET ACCESS:
At least deep in distress Pak authorities and exporters, particularly textile exporters have been looking for positive not, but indeed. Whatever may today be longing of authorities and exporters a vast majority of people is extremely illusioned. The demand from this troubled country has been for nearly four to five years. The US move to has at least in case of ROZs is as old but congress and senate are in the way keeping blocked.
Many will argue Washington is perhaps overly conscious about security dimensions to the challenge represented by extremism that is threat to Pakistan. Does it mean that in other words Pakistan is more in need of war machine than ROZs and market access to sell products Pakistan is looking for. But the US is not like Pakistan where decision making involves or confronts enigma. Whether any statement is sweet and helping is related with "terrorism" and its defeat.
The Washington based spokesman seemed in a hurry to convince Pakistanis that earlier they build closes ties with neighbours. India and Afghanistan better for all. How hard pressed are the East and West sends of Pakistan is very well known to the world. Suggesting Pak to develop and make amicable approach simplistic and naïve. This country was and is increasingly helpless and in lurch following giant floods some weeks back. Pak needs all help without asking any thing in return. The EU package nearly ripe is lying in some corner of WTO body, while congress is taking care of favour hurled on Pak face after an interval.
TDAP EYEING JAPANESE MARKET: COMMENDABLE MOVE:
The TDAP had been doing subdued job by exploiting fairs being held in various parts of the world major being heim textile in Frankfurt, Germany. It is not proper to compare achievement of the Trade Development Authority of Pakistan healed by outgoing chief and the one at the moment. What however is advisable that even earnest planning and capturing various prospective markets is lent a must. Chinese exporters who undoubtedly rule the world markets of all types and prices should be a role model. The Tetro and Jica, mentioned with rest is known names trying upgrade what Pak exporters could improve, even if local unskilled labourers have to train and made skilled.
The TDAP chief has seized the opportunity to participation in JFW-IFF fairs scheduled in July 2011. All arrangements have been finalised for providing all needs including affixation of visa. Tetro has already fixed meetings with big Japanese companies like Milsi Bussan Inter, Fashion Ltd, Sojitz Corporation etc, besides calling on big chain stores in that country. It needs no mention, like the US and the EU, Japan is decidedly most prospective and all absorbing supplies from Pakistan. It is hoped expectations will come true as Japan in a very big market with imports of textile, garments and towels worth $20 billion. It is pertinent to ask as to why authorities stayed obvious to aspire for Pak share in the 'loot'.